AGO 2006-01.

• Case Date: May 16, 2006
• Court: Indiana

Indiana Attorney General Opinions 2006. AGO 2006-01. STATE OF INDIANA OFFICE OF THE ATTORNEY GENERAL INDIANA GOVERNMENT CENTER SOUTH, FIFTH FLOOR 402 WEST WASHINGTON STREET INDIANAPOLIS, IN 46204-2770 TELEPHONE (317) 232-6201 STEVE CARTER ATTORNEY GENERAL. May 16, 2006OFFICIAL OPINION 2006-1Honorable Connie Kay NassAuditor of State Statehouse, Room 240 200 W. A Washington StreetIndianapolis, Indiana 46204 Re: Ind. Code § 4-13-2-14.8 Dear Auditor Nass: You requested guidance concerning several matters related to Ind. Code § section 4-13-2-14.8, which states in part:(a) Notwithstanding any other law, rule, or custom. but subject to subsections (c) and (d). a person who has a contract with the state or submits invoices to the state for payment shall authorize in writing the direct deposit by electronic funds transfer of all payments by the state to the person. The person's written authorization must designate a financial institution and an account number to which all payments are to be credited. The statute provides for a waiver of the requirement for a person who has no bank account and cannot open one without being charged a fee. The statute also provides for a waiver if the person's bank is unable to accept an electronic deposit. You raised the following questions: (1) If the state is unable to make payment to a vendor because the vendor fails to submit information necessary for direct deposit. is the state liable for late payment penalties or interest? (2) Does section 4-13-2-14.8 require a local governmental unit that requests payment from the state to agree to payment through an electronic funds transfer? (3) Does section 4-13-2-14.8 require a state employee who requests reimbursement for travel expenses incurred while on traveling on state business to agree to payment through electronic funds transfer? Brief Answer (1) The state is not liable for late payment penalties or interest if the vendor fails to provide the information necessary for an electronic funds transfer. (2) A local governmental unit is a "person" for purposes of section 4-13-2-14.8. so the local government unit must agree to direct deposit of payments due under a contract or for an invoice, unless the unit qualifies for a waiver of this provision. (3) A state employee seeking reimbursement for travel expenses incurred while traveling on state business is a person submitting invoices for purposes of section 4-13-2-14.8, so the employee must agree to direct deposit of payments for reimbursement, unless the employee qualifies for a waiver. Analysis (1) Liability for late payment penalties or interest Section 4-13-2-14.8(a) states that "a person who has a contract with the state or submits invoices shall authorize in writing the direct deposit by electronic funds transfer of all payments by the state to the person." (emphasis added.) Subsection (b) of the statute states "[a]fter obtaining the authorization required by...